The Panamanian government secured 228.2 million dollars through a local Treasury bill sale this week. The Ministry of Economy and Finance (MEF) reported overwhelming investor demand, far exceeding its initial 50 million dollar target for the auction held on November 20, 2025.
This tenth auction for the 2025 fiscal year attracted total offers worth 298.03 million dollars. Market participants submitted 201.65 million in competitive bids alongside 87.99 million in non-competitive offers. The massive oversubscription, more than 5.7 times the indicative amount, signals robust confidence in the nation’s short-term debt instruments according to government officials.
The high demand obtained reflects the firm confidence of the market in Panamanian Treasury instruments [Translated from Spanish], the MEF stated in its official release.
Authorities ultimately awarded 189.39 million dollars in the main auction. An additional 38.8 million dollars was allocated for Compensation of Preferential Interests, bringing the day’s total fundraising to 228.2 million dollars.
Favorable Market Conditions and Pricing
Panama’s latest Treasury bill sale concluded with a cut-off yield of 4.954 percent. This represents a notable ten basis point improvement over the 5.01 percent yield recorded during the October auction. The lower yield indicates a reduction in the government’s short-term borrowing costs.
Market benchmarks presented a mixed picture leading up to the sale. The 12-month SOFR rate increased by one basis point while the 12-month UST Bill rate rose by eight basis points. Conversely, the EMBIG sovereign risk index for Panama improved significantly, dropping 21 basis points.
The auction’s cut-off price settled at 95.23 percent, surpassing the level seen in the previous month’s sale. This price point confirms greater efficiency in the financing cost for the state. With this pricing, the government accepted approximately 62.5 percent of all offers presented during the auction process.
Strategic Allocation and Greenshoe Option
Financial authorities employed strategic allocation methods to manage the high demand. A portion of the accepted bids, totaling 8.4 million dollars, came from what is commonly known as a greenshoe option. This mechanism allows for additional allocation beyond the primary auction amount.
The weighted average yield for the entire issuance was 4.911 percent. This rate sits below the cut-off yield, suggesting the government secured favorable pricing across most of its accepted bids. The strong performance occurred despite upward pressure on base interest rates internationally.
Panama’s comparable global rate increased by eight basis points to 4.84 percent in the same period. The fact that the local Treasury Bills performed well against this backdrop underscores domestic market strength. Sixteen non-competitive offers demonstrated particular confidence from certain investors who accepted whatever yield the auction determined.
This successful debt placement provides immediate liquidity for government operations. The Ministry of Economy and Finance now has additional fiscal space as it navigates the remainder of the 2025 budget cycle. The solid demand profile suggests investors maintain a positive outlook on Panama’s near-term economic stability.
Market analysts view the auction results as a positive indicator for Panama’s financial health. The ability to raise substantial capital at improving rates, especially in the local market, reduces reliance on international borrowing. This successful Treasury bill issuance represents one of the final major domestic funding operations for the current fiscal year.